Asia PMI preliminary data shows resilience, cost pressures do not impede demand expansion, interest rate hike expectations diverge

```html(1) Despite ongoing Middle East conflicts and tightening financial conditions, manufacturing and services in Asia continue to expand. S&P Global PMI preliminary data show that Australia, Japan, and India all saw growth in private sector activity in August, with demand stimulating new orders and improved business confidence. (2) Australia's composite PMI dropped from 53.2 to 52.5 but has expanded for three consecutive months. Improved order conditions supported economic activity, and businesses are more optimistic about growth prospects for the coming year. The Reserve Bank of Australia has warned of possible further rate hikes, with strong data potentially providing justification for tighter policy. (3) Japan's composite PMI rose to 53.4, the highest since the outbreak of the Iran war, with output growth at its fastest pace since February. Cost pressures remain due to a weak yen and high energy prices, but the overall inflation rate has fallen to a five-month low. Capital Economics believes these data strengthen the case for a rate hike next month. (4) India's private sector growth improved, with input cost pressures persisting but rising at the slowest pace in seven months, and robust employment growth to meet demand. HSBC points out that cost pressures are easing but businesses are raising prices faster, indicating a stronger pass-through effect. India's central bank lowered its inflation forecast but hopes to retain policy flexibility. (5) PMI data from the three major economies highlight economic resilience, but the ongoing Middle East crisis continues to pose a threat of inflation. Central banks in each country hold differing positions regarding further rate hikes—Bank of Japan is hawkish, Reserve Bank of Australia is keeping options open, and India's central bank remains cautious.```